WASHINGTON, D.C. — Wal-Mart’s vice president of produce and floral says the retailer’s scale and leverage can mean rapid expansion of its local food and sustainability initiatives.
Wal-Mart not only has the power to induce change, Dorn Wenninger said, but executives are evaluated on how they reach those goals.
Wenninger spoke Feb. 22 at the U.S. Department of Agriculture’s 2013 Agricultural Outlook Forum.
He outlined Wal-Mart’s commitment to local growers, which he said is driven by the 100 million consumers who shop its stores every week. Wenninger said that 40% of Wal-Mart’s customers say that locally grown food is important to them and almost all shoppers’ value freshness.
“Our consumers equate local with freshness,” he said.
Wal-Mart defines local produce as produce grown and sold in the same state. In 2010, the company said it would double local produce on the shelves by 2015, and Wenninger said the retailer has added “hundreds of millions” in local produce sales and is on track to hit that goal. All 50 states have locally grown programs for Wal-Mart, and the chain is recognizing local growers with in-store and media marketing efforts, he said.
Wenninger said sourcing local produce isn’t without challenges. The irony is that local produce can sometimes be more expensive to deliver, he said.
“Because of scale and the challenges of logistics, it is frequently more costly to deliver local produce here in Washington, D.C., that comes from Virginia than it is to deliver whole loads of apples from Yakima, Wash., due to the economies of scale and efficiencies involved,” he said.
Working with smaller growers to meet the needs of Wal-Mart’s size can bring surprises, he said.
Two years ago, Wal-Mart arranged to buy from watermelon from growers in Tuskegee, Ala. Those growers assumed they were to supply 17 pickup loads, but the chain was expecting 17 tractor trailer loads, he said. This summer, those watermelon growers in have geared up to supply between 100 and 300 truckloads of watermelons to Wal-Mart.
Wenninger said Wal-Mart has begun to use its national scale to focus on local foods.
Part of that was done by reorganizing produce purchasing. Several years ago the chain created two levels of buyers.
While retaining produce purchasing in Bentonville, Wal-Mart opened offices in California, Washington, Texas and Florida. Those offices are staffed with produce buyers knowledgeable about local fruit and vegetable production.
“It is actually easier to buy 100 loads of apples in Washington than it is to buy 200 half-loads scattered around the Northeast,” he said.
The challenge for Wal-Mart is collectively get through some of those barriers to take advantage of the benefits of local produce, he said.
Wenninger has more 20 years of experience in the food industry in production, supply, logistics and sales. Previous stints were at Chiquita Brands International (in charge of South American operations), Driscoll’s (vice president of European operations), Florida berry company Clear Springs and S. Katzman Produce. He joined Wal-Mart three years ago as vice president of global food sourcing.